In this article, we discuss 15 stocks to buy with steady dividends. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Stocks to Buy with Steady Dividends.
Investment trends have evolved significantly over time in response to shifts in the market and the preferences of investors. Nevertheless, dividend stocks have consistently attracted interest in the market due to their capacity to provide a dependable source of income. Nearly 77% of the companies in the S&P 500 pay dividends and the policies of individual companies can vary widely, with some paying higher dividends than others.
Over the years, the importance of dividends in contributing to overall investment returns has increased significantly. A report from Morgan Stanley suggested that in the coming years, stock market gains may be smaller with higher volatility. As a result, the portion of the market returns coming from dividends might become more important. From 2013 to 2022, dividends made up about 17% of the total returns in the S&P 500 Index. However, if we look at a much longer period starting from the 1930s, dividends contributed to 37% of the returns. It's expected that the next few years will resemble this longer-term trend. This growing recognition of the role dividends play in long-term wealth accumulation has led to increased attention from investors seeking both income and capital appreciation.
Since the start of 2023, a group of giant tech companies has made it difficult for other parts of the market to perform better than the S&P 500. While dividend stocks, in general, have not done well compared to the index this year, there have been some positive developments. The ProShares S&P 500 Dividend Aristocrats ETF (NOBL), which invests in companies with dividend growth track records over 25 consecutive years, is aiming to recover with its straightforward approach. The fund has gained 4.98% year-to-date, which is considerably lower than the 18.9% return of the S&P 500. However, this performance represents a promising beginning in terms of a potential recovery for the fund.
The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some of the most popular stocks among investors that have raised their dividends for decades. These companies are resilient, profitable, generate substantial cash flow, and are typically capable of enduring various economic conditions.
Analysts have been paying close attention to dividend stocks this year due to their possible resurgence in the markets. In one of her recent interviews with CNBC, Sandy Pomeroy, a senior portfolio manager at Neuberger Berman, presented a positive outlook on dividend stocks over the next years. Here are some comments from the analyst:
“Dividend stocks are so cheap right now, that maybe you just have a reversal based on the fact that they are as cheap as they have been since the tech boom of the 1990s. When we did that we were three standard deviations cheaper relative to that period, three standard deviations cheaper now. And they went on to have a great decade. They were the outperformers for the next ten years.”
In view of these arguments and the analyst’s remarks, we will discuss some of the best dividend stocks to buy with steady dividends.
15 Stocks to Buy with Steady Dividends
Our Methodology:
For this article, we scanned Insider Monkey's database of 910 hedge funds as of Q2 2023 and picked dividend stocks with over 10 consecutive years of dividend growth and dividend yields over 2%, as of September 4. After that, we gathered the price forecasts and ratings given to these stocks by Wall Street analysts and other investment firms. From the resultant list, we picked 15 stocks with the highest upside potential based on their price targets. The stocks are ranked in ascending order of upside potential as of September 4.
Exxon Mobil Corporation (NYSE:XOM) is one of the world's largest oil and gas companies. Its primary activities include exploration, production, refining, and marketing of oil and natural gas products. The company is one of the best stocks with steady dividends because it has raised its dividends for 40 consecutive years. It currently pays a quarterly dividend of $0.91 per share and has a dividend yield of 3.21%, as recorded on September 4.
In addition to Exxon Mobil Corporation (NYSE:XOM), The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) boast decades-long dividend growth streaks, becoming some of the top choices for investors.
At the end of Q2 2023, 71 hedge funds in Insider Monkey's database reported having stakes in Exxon Mobil Corporation (NYSE:XOM), compared with 73 a quarter earlier. The collective value of these stakes is over $3.08 billion. With over 13.3 million shares, First Eagle Investment Management was the company's leading stakeholder in Q2.
The Procter & Gamble Company (NYSE:PG) is an American multinational consumer goods company that specializes in a wide range of consumer products across various categories. The company currently offers a quarterly dividend of $0.9407 per share and has a dividend yield of 2.44%, as of September 4. It has raised its dividends consistently for 67 years, which makes it one of the best stocks with steady dividends.
As of the close of Q2 2023, 74 hedge funds tracked by Insider Monkey owned stakes in The Procter & Gamble Company (NYSE:PG), worth over $5.3 billion in total.
Comcast Corporation (NASDAQ:CMCSA) is next on our list of stocks with steady dividends. The major telecommunications and media company declared a quarterly dividend of $0.29 on July 27, which was consistent with its previous dividend. It has raised its dividends for 15 years straight. The stock's dividend yield on September 4 came in at 2.54%.
Of the 910 hedge funds tracked by Insider Monkey, 66 funds owned investments in Comcast Corporation (NASDAQ:CMCSA), down from 68 in the previous quarter. The collective value of these stakes is over $3.1 billion.
Broadcom Inc. (NASDAQ:AVGO) is a global semiconductor and infrastructure software company known for its diverse portfolio of products and services. The company was a part of 72 hedge fund portfolios at the end of Q2 2023, which remained unchanged from the previous quarter, as per Insider Monkey's database. The stakes owned by these hedge funds hold a collective value of nearly $4.2 billion.
Broadcom Inc. (NASDAQ:AVGO), one of the best stocks with steady dividends, has raised its dividends for 12 consecutive years. The company currently pays a quarterly dividend of $4.60 per share and has a dividend yield of 2.11%, as of September 4. In the third quarter of 2023, it returned nearly $2 billion to shareholders through dividends.
Johnson & Johnson (NYSE:JNJ) is an American multinational healthcare and pharmaceutical conglomerate. The company operates in various segments of the healthcare industry and is involved in a wide range of activities. On August 24, the company announced its quarterly dividend of $1.19 per share, which was in line with its previous dividend. It maintains a 61-year streak of consistent dividend growth. The stock's dividend yield on September 4 stood at 2.97%.
At the end of the June quarter of 2023, 88 hedge funds in Insider Monkey's database owned stakes in Johnson & Johnson (NYSE:JNJ), growing from 86 in the previous quarter. The total value of the stakes is more than $4.1 billion.
Merck & Co., Inc. (NYSE:MRK) is a multinational global pharmaceutical company that is primarily known for its research, development, and production of prescription drugs and vaccines. The company is one of the best stocks with steady dividends as it holds an 11-year track record of growing dividends. It currently pays a quarterly dividend of $0.73 per share for a dividend yield of 2.66%, as of September 4.
Insider Monkey's database of 910 hedge funds indicated that 78 funds were bullish on Merck & Co., Inc. (NYSE:MRK) at the end of Q2 2023, up from 75 in the previous quarter. These stakes are collectively valued at over $2.65 billion. With roughly 3 million shares, AQR Capital Management was the company's leading stakeholder in Q2.
Bristol-Myers Squibb Company (NYSE:BMY) is another biopharmaceutical company that made it to our list of best stocks with steady dividends. The company has been boosting dividends for 17 consecutive years, becoming one of the top choices for investors. It currently pays a quarterly dividend of $0.57 per share and has a dividend yield of 3.68%, as of September 4.
At the end of Q2 2023, 66 hedge funds tracked by Insider Monkey held investments in Bristol-Myers Squibb Company (NYSE:BMY), compared with 68 in the previous quarter. The total value of these stakes stood at nearly $1.7 billion.
Union Pacific Corporation (NYSE:UNP) is an American transportation company that is known for its railroad operations but it also offers various logistics and related services. It was a popular stock among hedge funds in Q2 2023, as 84 funds in Insider Monkey's database were bullish on the company, owning collective stakes worth over $4.15 billion.
On July 26, Union Pacific Corporation (NYSE:UNP) declared a quarterly dividend of $1.30 per share, which remained unchanged from its previous dividend. Overall, the company has been raising its dividends for 16 years running. As of September 4, the stock has a dividend yield of 2.35%.
Medtronic plc (NYSE:MDT) is a multinational medical technology company that mainly specializes in medical devices and other healthcare solutions. The company offers a quarterly dividend of $0.69 per share and has a dividend yield of 3.36%, as of September 4. It is one of the best stocks with steady dividends as it has raised its payouts for 46 years straight.
Medtronic plc (NYSE:MDT) saw growth in hedge fund positions in Q2 2023, as 63 funds in Insider Monkey's database owned investments in the company, compared with 52 in the previous quarter. The overall value of these stakes is over $1.8 billion.
AbbVie Inc. (NYSE:ABBV) ranks sixth on our list of stocks with steady dividends. The global pharmaceutical company is a Dividend King with 50 consistent years of dividend growth under its belt. It currently pays a quarterly dividend of $1.48 per share and has a dividend yield of 3.99%, as of September 4.
Other dividend stocks that are grabbing investors' attention include The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
As of the close of Q2 2023, 74 hedge funds tracked by Insider Monkey reported having stakes in AbbVie Inc. (NYSE:ABBV), down slightly from 75 in the previous quarter. The total value of these stakes is over $2.377 billion. Among these hedge funds, Citadel Investment Group was the company's leading stakeholder.
